Norway's $1.7 trillion sovereign wealth fund (Norges Bank Investment Management) plans to vote against Elon Musk's proposed $56 billion compensation package, citing concerns about its excessive size, structure, performance triggers, dilution, and key person risk. The fund holds a 0.98% stake in Tesla worth $7.7 billion,
Proxy advisory firms Glass Lewis & Co. and Institutional Shareholder Services (ISS) have also advised shareholders to vote against the package.
Tesla shareholders are voting on whether to restore Musk's 2018 pay package, which includes 303 million split-adjusted stock options worth $46.9 billion after it was initially thrown out by a Delaware judge who called it an "unfathomable sum."
Some shareholders argue that the original compensation plan was unfair and criticized the board's independence from Musk, while others support Musk, citing his performance under the contract. The outcome may determine Musk's level of involvement with Tesla moving forward.
In 2018, approximately 90% of Tesla's retail shareholders, who own about 45% of the company, voted to approve Elon Musk's compensation plan, which stated that if Tesla's value grew by 1900% in 6 years, Musk would receive around 9% of the shares as a reward.
Last July, Tesla's directors agreed to return $735 million to the company to settle allegations of overpayment in a separate lawsuit filed in 2020.
A user on social media platform X disclosed that Norway's sovereign wealth fund plans to sell its 31.6 million shares of Tesla stock, to which Musk responded, "this is not cool," claiming overwhelming support from retail shareholders.
NBIM supported shareholder proposals for Tesla to adopt a freedom of association and collective bargaining policy, respect labor rights, transfer its state of incorporation to Texas from Delaware, and for Kimbal Musk to join Tesla's board of directors. Tesla faces labor disputes in Sweden, where mechanics have been on strike since October 27, highlighting the importance of labor rights and collective bargaining.
Sources: Reuters, New York Post, Business Insider, CNN, SCMP, Benzinga, Times of India, cnbeta.com.tw, IndiaTV News
This article was written in collaboration with Generative AI news company Alchemiq.
